The buzzword going around the commercial real estate industry is “creative office space,” a new type of workplace that incorporates user experience, community and amenities that enhance user well-being. This trend is not likely to burn out quickly with the nation’s millennial workers, aged between 18 and 34, now driving the demands of the workforce and workplace landscape.
One of the changes in commercial real estate is that we used to force people to adapt to the buildings we had. Now, we are adapting buildings to individuals’ workflows…Employee happiness is becoming a big factor in design. ‘People first’ is the new catch phrase. Diane Davidson, Chief Operations Officer, Sperry Van Ness International
Creative office is taking the hint from co-working centers and executive suites and executing shareable business centers in repositioned, thought to be previously obsolete, industrial buildings or office parks in suburban and midtown locations. According to a report published last year by NGKF,
Between 14% and 22% of suburban-office inventory in five office-tenancy submarkets – Santa Clara, in the San Francisco Bay Area; Denver; the O’Hare area of Chicago; Reston and Herndon, outside of Washington, D.C.; and Parsippany, New Jersey – is in some stage of obsolescence, suggesting that between 600 million and 1 billion square feet of office space are unnecessary for the modern company and worker. That’s about 7.5 percent of the country’s entire office inventory. Newmark Grubb Knight Frank
Developers, designers and investors are gaining inspiration from lifestyle concepts that allow for flexible, open floor plan, plug-and-play spaces. These types of spaces are attractive to many next-stage companies after incubation. A leading company that champions the creation of workplaces that reflect its brand and local culture is Google. A perfect example is the Google location in Madison, Wisconsin, that was designed to welcome new recruits with workspaces that encourage collaboration and alternative spaces, allowing employees to choose where and how they work best.
Besides the shifting demographics, evolving technology is a large driving force behind creative office space. Due to today’s rising independent workforce, now 30 million strong, workers are deciding where their work gets done, whether it be in their local Starbucks with free Wi-Fi or in a thoughtfully-designed office space that allows for connection with colleagues and contribution to company culture.
Full-time independent contractors and free-lancers accounted for a 12% increase in the nation’s workforce over the past 5 years, compared to a 7% increase in overall U.S. employment. Audra Capas, President, 5StarPR LLC
While commercial real estate is adapting to the trend, there remains an increased pressure to enact cost saving initiatives to increase net operating income and creative office space doesn’t come cheap. The challenge is to rethink the workplace and deliver space that exceeds the c-suite’s expectations and provides a satisfying experience for the next generation of workers.
Instead of letting lease expirations drive change, examine how workplace design can yield long-term value. Contact Meissner Jacquét Commercial Real Estate Services to learn how to reposition your commercial real estate asset.
Sources:
NAIOP, Development, Volume XLVI No. 4, Winter 2015/2016
The Atlantic, The Plight of the Suburban Office Park